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Havelock Europa PLC (HVE)

Tuesday 05 April, 2005

Havelock Europa PLC

Final Results

Havelock Europa PLC
05 April 2005
Tuesday 5 April 2005
HAVELOCK EUROPA PLC - PRELIMINARY ANNOUNCEMENT
2004 was a year of considerable progress for Havelock. Underlying pre-tax profit
(profit before exceptional items and goodwill amortisation) showed a marked
increase for a third consecutive year, to £5.0 million (2003 : £4.3 million),
boosted by a first-time contribution from the two companies acquired mid-year in
the education supply sector, TeacherBoards and Clean Air.
Financial Highlights
•On an underlying basis, pre-tax profit increased by 16% to £5.0m and
earnings per share were 10.9p, up 9%.
•On a reported basis, profit before tax totalled £4.5m (2003: £4.7m) and
basic earnings per share were 9.2p (2003: 11.7p). 2003 benefited from an
exceptional tax free profit of £0.9m.
•The Group's financial position remains strong despite the net cash
outflow of £6.4m in acquisition consideration which was partially offset by
the £1.7m net proceeds from a share placing in July. Net debt at the year
end amounted to £14.6m (2003: £10.5m) and gearing slightly reduced to 84.7%
(2003: 87.5%). Interest cover was a comfortable 4.6 times (2003: 4.8 times),
before exceptionals.
•Dividends per share are increased by 14% to 3.2p, covered 2.7 times, in
line with the Group's progressive dividend policy.
Commercial Highlights
•ESA McIntosh, the UK market leader in science laboratories and fitted
furniture for schools, benefited from strong direct sales to schools and
Local Authorities but as announced in the Pre-Close Season Trading Update of
28 January 2005, suffered to some extent from contract delays in the PFI
sector, which has resulted in a lower contribution to profits than was
originally expected.
•The two new businesses acquired in the summer of 2004, TeacherBoards
(which designs and manufactures teaching aids and display boards) and Clean
Air (which manufactures fume cupboards for industrial, university and
science laboratories), performed well.
•The Point of Sale Display Division had a good year, contributing
substantially to profit.
•The Retail Interiors Division traded better than expected, making a small
but improved profit.
Prospects for 2005
The Group has made an encouraging start to the year with good levels of
enquiries in each of its divisions. With much of the benefit of the high volume
of enquiries in the LEA and direct-to-schools segment of the education sector
not being converted into business until the summer holidays, the Group's results
for 2005 will, even more than previously, be heavily slanted towards the second
half of the year. The impact of the implementation of IFRS on revenue
recognition is likely to exaggerate this seasonal bias.
Malcolm Gourlay, Chairman, stated 'The Board believes that significant further
progress will be made in the current year as a whole and that Havelock remains
well placed to benefit from increasingly high levels of Government educational
expenditure thereafter.'
Enquiries:
Havelock Europa PLC 01383-820 044
Hew Balfour (Chief Executive) 07801-683 851
Graham MacSporran (Finance Director) 07801-683 803
Bankside Consultants Limited
Charles Ponsonby 020-7444 4166
CHAIRMAN'S STATEMENT
2004 was a year of considerable progress for Havelock. Underlying pre-tax profit
(profit before exceptional items and goodwill amortisation) showed a marked
increase for a third successive year, to £5.0 million (2003 : £4.3 million),
boosted by a first-time contribution from the two companies acquired mid-year in
the education supply sector, TeacherBoards and Clean Air.
Despite some deferral in the timing of new contracts in the education PFI
market, as announced in the Pre-Close Season Trading Update of 28 January 2005,
prospects for the Group remain positive for 2005 and beyond.
FINANCIAL OVERVIEW
The 16% increase in underlying profit was achieved despite a decrease in
turnover to £87.6 million (2003 : £97.7 million), as a result of a more
selective approach to business within the Retail Interiors Division. Underlying
earnings per share were 10.9p (2003 : 10.0p), up 9%. The underlying figures
exclude goodwill amortisation charges of £0.5 million in 2004 (2003 : £0.3
million) and in 2003 the exceptional profit of £0.9 million arising from the
partial disposal of the Group's share of the Middle East joint venture, Havelock
AHI, along with exceptional reorganisation charges of £0.2 million.
On a reported basis, profit before tax totalled £4.5 million (2003: £4.7
million) and basic earnings per share were 9.2p (2003 : 11.7p). The prior year
figure benefited from the exceptional gain arising from the Middle East, which
was tax free.
2004 saw a strong performance from the Point of Sale Display Division; an
improved contribution from Retail Interiors; a good return, despite the deferral
of a number of expected contracts in the last quarter, from the Group's
education interiors subsidiary, ESA McIntosh, and an excellent maiden
performance from each of the two newly acquired businesses, TeacherBoards and
Clean Air.
The Group's financial position remains strong despite the net cash outflow of
£6.4 million in acquisition consideration which was partially offset by the £1.7
million of net proceeds from a share placing in July. Net debt at the year end
amounted to £14.6 million (2003 : £10.5 million) and gearing slightly reduced to
84.7% (2003 : 87.5%). Interest cover was a comfortable 4.6 times (2003 : 4.8
times before exceptionals).
DIVIDENDS
The Board is proposing a 14% increase in the final dividend per share to 2.4p
(2003 : 2.1p), in line with the Group's progressive dividend policy. If approved
at the Annual General Meeting on 24 June 2005, the dividend will be paid on 4
July 2005 to shareholders on the register at close of business on 3 June 2005.
Including the interim dividend per share of 0.8p (2003 : 0.7p), paid on 29
December 2004, the proposed dividends per share for the year will total 3.2 p
(2003 : 2.8p), which is up 14% on 2003 and covered 2.7 times.
TRADING REVIEW
Education Furniture
ESA McIntosh is the UK market leader in the design, manufacture and installation
of science laboratories and fitted furniture for schools, with facilities in
Kirkcaldy, Fife.
Turnover increased to £22.7 million (2003 : £20.9 million) as a result of a
particularly strong showing in direct sales to schools and Local Education
Authorities. As expected, turnover in the PFI segment fell slightly as the first
phase of school refurbishments and rebuilding in Scotland, financed through the
PFI, was concluded. Towards the end of the year, contract delays in the PFI
sector became more apparent, particularly in relation to work where Jarvis is,
or was, originally the main contractor. As a result, ESA McIntosh's contribution
to profits was at a lower level than originally expected. The 2004 result
included expenditure of some £0.5 million incurred in gearing up for increased
activity in the future.
Education Supply
The two new businesses acquired in the summer of 2004, TeacherBoards and Clean
Air, performed well.
TeacherBoards, based in Skipton, North Yorkshire, designs, manufactures and
distributes teaching aids and display boards. Turnover was £5.7 million for the
12 months ended 31 December 2004, with some £2.9 million falling within the six
months in which TeacherBoards formed part of the Group. An initial earn-out
payment of £1.15 million has been made, with a further £0.25 million to follow
in 2006, subject to profit before tax in the current year reaching £1.0 million.
These payments reflect a performance which exceeded TeacherBoards' earnout
target for 2004.
Clean Air, based in Bolton, Lancashire, manufactures fume cupboards for
industrial, university and science laboratories. Turnover was £3.5 million in
the 12 months to 31 December 2004, of which £1.7 million related to the 51/2
months under Havelock Europa's ownership. The first earn-out payment of £0.51
million will be made shortly in relation to this performance, with up to a
further £1.29 million to follow, based on the profit before tax, in the current
year, achieved in excess of £1 million.
Point of Sale Display
The Point of Sale Display Division prints promotional graphics and manufactures
display equipment for use in retail and branded goods businesses, typically as
part of marketing rather than capital expenditure budgets, at its facilities in
Letchworth and Bristol.
The Division had a good year, contributing substantially to profit. Turnover
increased to £25.5 million (2003 : £24.1 million), with a strong performance in
both printing businesses. The Division benefited from further capital
investment, including the introduction of a new four-colour large-format screen
printing line at Letchworth, along with new digital printing equipment and the
latest technology in direct imagery. Investment in new technology has borne
considerable fruit in terms of enhancements to productivity throughout the
Division.
Retail Interiors
The Retail Interiors Division designs, manufactures and installs interiors for
retailers, banks, hotels and healthcare facilities. It has a factory co-located
with the Group's Head Office in Fife and a sales office in Derbyshire.
The Division traded better than expected, making a small but improved profit. A
more selective approach to business resulted in a lower level of turnover at
£34.8 million (2003 : £52.3 million) which, coupled with a modest amount of
investment in new machinery, served to raise gross margins, improve productivity
and increase the Division's overall contribution. Useful progress was made in
widening the customer base in the financial services sector.
Middle East Interiors
Havelock AHI, in which the Group owns a 17% stake, manufactures and installs
retail and hotel interiors from its base in Bahrain. A profit attributable to
the Group of £0.1 million was recorded.
INTERNATIONAL FINANCIAL REPORTING STANDARDS
In accordance with European Union Legislation, all listed companies in the
European Union are required to adopt International Financial Reporting Standards
(IFRS) for their consolidated financial statements from 2005.
The Group is undertaking an impact analysis of the effect of implementing IFRS
which is nearing completion. The first annual report and accounts prepared under
IFRS will be for the year ending 31 December 2005. The interim accounts for the
half year ending 30 June 2005 will also be prepared under IFRS and these
accounts will include re-stated annual and interim comparative financial
information together with information on the effects of the implementation of
IFRS.
STRATEGY
Havelock's strategy is to concentrate on UK markets offering significant
opportunities for profitable growth. In this context, a programme of expansion
in healthcare and education is already underway.
At the same time, as detailed in the Interim Announcement of 28 September 2004,
the role of the Retail Interiors Division in Group activities continues to
evolve. While the Division is committed to remaining a market leader in its
sector, it intends to concentrate on UK retailers, banks and hotels which
require and value a consistency of quality in manufacturing and service
delivery. In addition, the Division is now devoting a proportion of its
resources to support the supply of equipment and services for other parts of the
Group, notably ESA McIntosh and the Point of Sale Display Division. Further,
with effect from the last quarter of 2004, the Division assumed responsibility
for the Group's developing activities in the healthcare furniture market, where
progress is already being made.
CURRENT TRADING AND PROSPECTS
The Group has had an encouraging start to the year.
The level of ESA McIntosh's enquiries from Local Education Authorities is
sizeably up on previous years. There is, however, clear evidence that a smaller
number of PFI projects reached financial close in the final quarter of 2004 than
was originally anticipated. As was announced in the Pre-Close Season Trading
Update of 28 January 2005, this will constrain ESA McIntosh's growth in 2005, as
compared with earlier expectations. Nevertheless, there is firm evidence that
growth in the volume of business to be derived from the PFI sector will continue
in 2006.
Within the education supply sector, order books at both TeacherBoards and Clean
Air remain solid.
The Point of Sale Display Division has had another strong start to the year,
with business in the first quarter at robust levels.
Whilst turnover for the Retail Interiors Division will, as usual, be biased
towards the second half, a further year of progress, bolstered by a growing
volume of work in the healthcare market, is anticipated.
With much of the benefit of the high volume of enquiries in the LEA and
direct-to-schools segment of the education sector not being converted into
business until the summer holidays, the Group's results for 2005 will, even more
than previously, be heavily slanted towards the second half of the year. The
impact of the implementation of IFRS on revenue recognition is likely to
exaggerate this seasonal bias. Nevertheless, the Board believes that significant
further progress will be made in the current year as a whole and that Havelock
remains well placed to benefit from increasingly high levels of Government
educational expenditure thereafter.
Malcolm Gourlay 5 April 2005
Chairman
CONSOLIDATED PROFIT AND LOSS ACCOUNT
for the year ended 31 December 2004
2004 2004 2004 2003
Existing Acquisitions Total
Notes £000 £000 £000 £000
Turnover
Group and 83,066 4,580 87,646 97,742
share of
joint
venture
Less: share
of joint - - - (502)
venture's
turnover
_______ _______ _______ ______
Group 83,066 4,580 87,646 97,240
turnover
Operating
profit
before
exceptional
items
Group 4,580 1,061 5,641 4,979
Exceptional - - - (226)
costs
_____ _____ _____ ______
Operating
profit 4,580 1,061 5,641 4,753
after
exceptional
items
Share of
associated 104 - 104 47
company's
operating
profit
Share of
joint - - - (24)
venture's
operating
loss
______ ______ ______ _____
Total 4,684 1,061 5,745 4,776
operating
profit
Gain on
sale of - - - 935
interest in
joint
venture
______ ______ ______ ______
Profit on
ordinary 4,684 1,061 5,745 5,711
activities
before
interest
Net
interest
payable and
other
similar
items
Group (1,242) (981)
Associated (17) (19)
company
Joint - (2)
venture
______ ______
Profit on ordinary
activities before 4,486 4,709
taxation
Tax charge
on profit 3 (1,569) (1,249)
on ordinary
activities
______ ______
Profit for 2,917 3,460
the
financial
year
Dividend - (1,098) (871)
equity
______ ______
Retained 1,819 2,589
profit for
the year
______ ______
Basic 4 9.2p 11.7p
earnings
per share
Basic 4 10.9p 10.0p
adjusted
earnings
per share
Diluted 4 8.8p 11.3p
earnings
per share
Dividends 3.2p 2.8p
per share
All operations are continuing.
GROUP BALANCE SHEET
as at 31 December 2004
Group Company
2004 2003 2004 2003
(restated) (restated)
Notes £000 £000 £000 £000
Fixed assets
Intangible assets - goodwill 14,196 3,825 - 38
Tangible assets 13,888 12,786 10,348 9,413
Investment in associated
company 575 533 567 567
Investment in subsidiary
undertakings - - 21,526 8,645
______ ______ ______ ______
28,659 17,144 32,441 18,663
______ ______ ______ ______
Current assets
Stocks 5 7,730 5,616 5,620 4,586
Debtors 6 20,861 17,951 17,275 17,458
Cash at bank and in hand 627 1,348 - 899
______ ______ ______ ______
29,218 24,915 22,895 22,943
Creditors: Amounts falling
due within one year 7 (24,048) (18,768) (20,175) (16,126)
______ ______ ______ ______
Net current assets 5,170 6,147 2,720 6,817
______ ______ ______ ______
Total assets less current
liabilities 33,829 23,291 35,161 25,480
Creditors: amounts falling
due 8 (15,392) (10,505) (15,392) (10,505)
after more than one year
Provision for liabilities
and (1,164) (791) (1,064) (714)
charges
______ ______ ______ ______
Net assets 17,273 11,995 18,705 14,261
______ ______ ______ ______
Capital and reserves
Called up share capital 3,430 3,107 3,430 3,107
Share premium account 9 2,410 909 2,410 909
Merger reserve 9 1,582 - 1,582 -
Revaluation reserve 9 1,318 1,318 1,318 1,318
Profit and loss account 9 8,533 6,661 9,965 8,927
______ ______ ______ ______
Equity shareholders' funds 17,273 11,995 18,705 14,261
______ ______ ______ ______
STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES
for the year ended 31 December 2004
2004 2003
£000 £000
Profit for the year 2,917 3,460
Exchange loss on overseas investments (42) (56)
Movement in Long Term Incentive Plan shares held 95 -
______ ______
Total recognised gains relating to the year 2,970 3,404
Prior year adjustment - UITF 38 (228) -
_____ _____
Total gains recognised since last annual report 2,742 3,404
RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS
for the year ended 31 December 2004
2004 2003
£000 £000
Opening shareholders' funds - as previously stated 12,223 9,650
Prior year adjustment - UITF 38 (228) (23)
______ ______
Opening shareholders' funds - restated 11,995 9,627
______ ______
Profit for the year 2,917 3,460
Dividends (1,098) (871)
______ ______
Retained profit for the year 1,819 2,589
Exchange loss on overseas investment (42) (56)
Movement in Long Term Incentive Plan shares held 95 (205)
New share capital issued 3,406 40
______ ______
Net increase in shareholders' funds 5,278 2,368
______ ______
Closing shareholders' funds 17,273 11,995
______ ______
STATEMENT OF HISTORICAL COST PROFITS AND LOSSES
2004 2003
£000 £000
Reported profit on ordinary activities before taxation 4,486 4,709
Difference between a historical cost depreciation charge and
the actual depreciation charge of the year calculated on the
revalued amount 4 4
_____ _____
Historical cost profit on ordinary activities before 4,490 4,713
taxation
______ ______
Historical cost retained profit after taxation and dividends 1,823 2,593
______ ______
CONSOLIDATED CASH FLOW STATEMENT
for the year ended 31 December 2004
Notes 2004 2003
£000 £000
Cash inflow from operating activities 10(a) 6,727 5,399
Return on investment and servicing of finance
Interest received 4 1
Interest paid (1,209) (958)
______ _______
Net outflow from investment and servicing of finance (1,205) (957)
______ ______
Taxation (1,244) (107)
______ ______
Capital expenditure and financial investments
Purchases of tangible fixed assets (2,907) (2,052)
Proceeds from sale of tangible fixed assets 84 6
Loan to ESOP trust - (250)
______ ______
Net cash outflow from capital expenditure and
financial (2,823) (2,296)
investments
______ ______
Acquisitions and disposals
Net cash outflow in connection with acquisition of
subsidiary undertakings (6,356) -
Deferred consideration and fees - (45)
Cost of investment in associated company - (567)
Proceeds from disposal of interest in joint venture - 2,567
______ ______
Net cash (outflow)/inflow from acquisitions and disposals (6,356) 1,955
Equity dividends paid (928) (775)
______ ______
Cash (outflow)/inflow before financing (5,829) 3,219
______ ______
Financing
Repayment of loan notes issued on acquisition of
subsidiaries - (3,765)
Capital element of finance lease rental payments (103) (253)
Repayment of long term loan (1,250) (1,250)
Bank loan and other advances 4,750 2,455
Issue of new shares 1,656 40
Proceeds of exercise of share options 55 -
______ ______
Net cash inflow/(outflow) from financing 5,108 (2,773)
______ ______
(Decrease)/increase in cash for the year 10(b) (721) 446
______ ______
NOTES TO THE STATEMENT
1. The profit and loss account, balance sheet and abridged cash flow
statement do not constitute the Company's statutory accounts for 2004 or 2003
but are derived from those accounts. The statutory accounts for 2003, on which
the auditors have given an unqualified report, have been delivered to the
Registrar of Companies. Those for 2004 will be delivered following the Annual
General Meeting. The auditors have reported on those accounts which were
unqualified and did not contain a statement under Section 237(2) of the
Companies Act 1985.
2. Basis of consolidation
The consolidated profit and loss account and balance sheet include the financial
statements of the Company, its subsidiaries and its interest in an associated
company made up to 31 December 2004. The Group's share of the profits of the
associated company is included in the consolidated profit and loss account and
its interest in its net assets is included in the balance sheet.
3. Tax charge on profit on ordinary activities
2004 2003
£ 000 £ 000
UK corporation tax
- current year at 30% (1,181) (510)
- prior year (13) (27)
Deferred tax
- current year (310) (749)
- prior year (65) 37
______ ______
(1,569) (1,249)
______ ______
The current tax charge for the year differs from 30% of the pre-tax profit
because certain expenses are not deductible for tax.
4. Earnings per share
Based on a profit after adjusting for goodwill amortisation and tax of
£3,464,000 (2003:£2,973,000) and 31,638,007 (2003: 29,612,442) shares, being the
weighted average number of shares in issue during the year, the adjusted basic
earnings per share were 10.9p (2003: 10.0p).The weighted average number of
shares excludes the shares held by the ESOP Trust. Based on a profit after tax
of £2,917,000 (2003: £3,460,000) and 31,638,007 shares (2003: 29,612,442), the
basic earnings per share were 9.2p (2003: 11.7p).
2004 2003 2004 2003
£000 £000
Earnings Earnings Earnings Earnings
pence per pence per
share share
Basic 2,917 3,460 9.2 11.7
Adjusted for:
Gain on sale of investments - (935) - (3.2)
Exceptional costs - 226 - 0.8
Tax relief on exceptional costs - (68) - (0.3)
Goodwill amortisation 547 290 1.7 1.0
_______ ______ ______ ______
Adjusted basic 3,464 2,973 10.9 10.0
______ ______ ______ ______
Diluted 2,917 3,460 8.8 11.3
______ ______ ______ ______
The weighted average number of shares used in each calculation is as follows:
2004 2003
Number Number
of shares of shares
000s 000s
For basic and adjusted earnings
per share 31,638 29,612
Effect of exercise of share
options 1,540 1,023
_______ _______
For diluted earnings per share 33,178 30,635
________ ________
Earnings per share are calculated for the issued shares excluding those held by
the Employee Share Scheme in accordance with UITF 13.
5. Stocks
2004 2003
£000 £000
Raw materials and consumables 3,312 2,380
Work in progress 1,454 1,439
Less: Payments to account (562) (677)
Finished goods 3,526 2,474
_____ _____
7,730 5,616
_____ ______
6. Debtors
2004 2003
£000 £000
Trade debtors 17,873 15,702
Other debtors 340 333
Prepayments 2,648 1,916
______ ______
20,861 17,951
______ ______
7. Creditors: amounts falling due within one year
2004 2003
£000 £000
Bank loans (secured) 1,250 1,250
Trade creditors 13,563 11,731
Corporation tax 954 510
Other taxes and social security 2,856 2,370
Accruals 2,180 2,155
Dividend proposed 823 653
Obligations under hire purchase contracts and finance leases 72 99
Provision for deferred consideration 2,350 -
______ ______
24,048 18,768
______ ______
8. Creditors: amounts falling due after more than one year
2004 2003
£000 £000
Bank loans (secured) 13,892 10,392
Obligations under hire purchase contracts and finance leases 50 113
Deferred consideration 1,450 -
______ ______
15,392 10,505
______ ______
9. Reserves
Group and Company Group Company
Share premium Merger Revaluation Profit and Profit and
reserve reserve loss account loss account
£000 £000 £000 £000 £000
At 1 January
2004 as
previously
stated 909 - 1,318 6,889 9,155
Prior year
adjustment -
reclassificati
on of
investment in
own shares - - - (228) (228)
______ ______ ______ ______ ______
At 1 January
2004 as
restated 909 - 1,318 6,661 8,927
Retained
profit for the
year - - - 1,819 943
Exchange loss
on overseas
investments - - - (42) -
Shares issued
pursuant to
acquisitions 1,501 1,582 - - -
Movement in
Long Term
Incentive Plan
shares held - - - 95 95
______ ______ ______ ______ ______
At 31 December
2004 2,410 1,582 1,318 8,533 9,965
______ ______ ______ ______ ______
Total goodwill written off directly to reserves in previous years
in respect of subsidiary undertakings at 31 December 2004 amounts
to £16,234,000 (2003:£16,234,000).
The profit after tax for the financial year attributable to the
Company was £2,041,000 (2003: £5,318,000)
10. Cash Flow Statement
2004 2003
£000 £000
(a) Reconciliation of operating profit to net cash inflow from operating
activities
Operating profit after exceptional items 5,641 4,753
Depreciation 1,933 1,918
Amortisation of goodwill 547 290
Gain on disposal of tangible fixed assets (30) (6)
(Increase)/decrease in stocks (1,149) 1,701
Increase in debtors (1,190) (1,226)
Increase/(decrease) in creditors 975 (2,031)
______ ______
Net cash inflow from operating activities 6,727 5,399
______ ______
(b) Reconciliation of net cash flow to movement in net debt
(Decrease)/Increase in cash for the year (721) 446
Finance lease payments 103 253
Finance lease creditor acquired with acquisition (13) -
Loan notes issued in the year - (2,455)
Loan notes repaid - 3,765
Bank loan repaid 1,250 1,250
New bank loan (4,750) (2,455)
______ ______
Movement in net debt in the year (4,131) 804
Opening net debt (10,506) (11,310)
______ ______
Closing net debt (14,637) (10,506)
______ ______
(c) Analysis of net debt
At 1 Cash Other Acquisition At 31
January flow non-cash (excluding December
2004 changes cash) 2004
£000 £000 £000 £000 £000
Cash at bank
and in hand 1,348 (721) - - 627
______ ______ ______ ______ ______
Debt due within one
year
Bank loans (1,250) 1,250 (1,250) - (1,250)
Finance lease
creditor (99) 103 (63) (13) (72)
______ ______ ______ ______ ______
(1,349) 1,353 (1,313) (13) (1,322)
______ ______ ______ ______ ______
Debt due after one
year
Finance lease
creditor (113) - 63 - (50)
Bank loans (10,392) (4,750) 1,250 - (13,892)
______ ______ ______ ______ ______
(10,505) (4,750) 1,313 - (13,942)
______ ______ ______ ______ ______
Total net debt (10,506) (4,118) - (13) (14,637)
______ ______ ______ ______ ______
11. Pension Costs
Pension costs SSAP24 basis
The most recent actuarial valuation of the defined benefit section was at 31
October 2003. At the valuation date, the defined benefit section had assets with
a total market value of £15.1m, which represented approximately 74% of the value
of the benefits that had accrued to members, after allowing for expected future
increases in pensionable pay for defined benefit members.
Pension costs FRS17 basis
The last full valuation of 31 October 2003 has been updated to 31 December 2004
by qualified independent actuaries, using revised assumptions that are
consistent with the requirements of the accounting standard, FRS17. The standard
requires certain disclosures this year under the transitional arrangements. In
summary, the UK defined benefits pension scheme has assets at a current market
value of £17.8m (2003: £16.4m) and liabilities, discounted at the AA bond yield,
of £26.4m (2003: £24.3m). Using this valuation method, there is a deficit of
£8.6m (2003: £7.9m) which is partially offset by deferred tax of £2.6m (2003:
£2.4m) giving a net deficit of £6.0m (2003: £5.5m).
The defined benefit section has been closed to new entrants.
12. The accounts for the year ended 31 December 2004 were approved by the
Directors on 5 April 2005.
This information is provided by RNS
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